Persian Gulf:

U.S. Agencies Need to Improve Licensing Data and to Document Reviews of Arms Transfers for U.S. Foreign Policy and National Security Goals

GAO-10-918: Published: Sep 20, 2010. Publicly Released: Sep 28, 2010.

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The United States uses arms transfers through government-to-government Foreign Military Sales (FMS) and direct commercial sales (DCS) to support its foreign policy and national security goals. The Departments of Defense (DOD) and State (State) have authorized arms worth billions of dollars to six Persian Gulf countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The United States established the Gulf Security Dialogue (GSD) to discuss security issues with these countries. GAO was asked to determine (1) the dollar value and nature of U.S. arms transfers authorized for the Gulf countries' governments, (2) the extent to which U.S. agencies documented how arms transfers to Gulf countries advanced U.S. foreign policy and national security goals, and (3) the role of the GSD. To conduct this work, GAO analyzed U.S. government regional plans, arms transfer data from fiscal years 2005 to 2009, case-specific documentation for fiscal years 2008 and 2009, and program guidance; and interviewed officials in Bahrain, Saudi Arabia, and the UAE.

GAO cannot determine the total value of authorized arms transfers to the governments of Gulf countries in part because State's DCS database also includes arms transfers authorized for U.S. military units stationed in those countries. GAO's review of State's database determined that at least $6 billion of the $21 billion of authorized transfers between fiscal years 2005 and 2009 were for U.S. military units in Gulf countries. In addition, some license values were counted twice. State's database system does not have the capability to separate authorizations by end-user or separate multiple authorizations that cover the same equipment. Consistent with statutory requirements, State included this data in reporting all license authorizations to Congress. In contrast, GAO could determine that the DOD-administered FMS program authorized about $22 billion in arms transfers to the six Gulf countries. Authorized transfers included air and missile defense systems, with the UAE and Saudi Arabia accounting for over 88 percent of total FMS authorizations. State and DOD did not consistently document how arms transfers to Gulf countries advanced U.S. foreign policy and national security goals for GAO selected cases. State assesses arms transfer requests against criteria in the Conventional Arms Transfer policy, including interoperability with the host nation and the impact on the U.S. defense industrial base. Additionally, DOD assesses FMS requests for significant military equipment against criteria in DOD policy, such as the impact on the recipient's force structure and the ability to monitor sensitive technology. GAO's analysis of 28 arms transfer authorizations--15 DCS and 13 FMS--found that State did not document how it applied its criteria to arms transfers, while DOD could not provide documentation on its review of release of technology for 7 of 13 FMS authorizations. Due to a lack of complete documentation, we cannot verify if U.S. agencies consistently reviewed authorizations. When established in 2006, GSD was intended to enable multilateral cooperation on six security-related topics between the United States and six Gulf countries, but it instead operates as a bilateral forum between the United States and five Gulf countries due to the preference of these countries. Saudi Arabia does not participate in GSD, but discusses security concerns at other forums. According to U.S. officials, GSD's agenda has evolved to focus on regional security and other concerns specific to the country participants. GAO recommends that (1) State take steps to improve the clarity and usefulness of DCS license data, and (2) State and DOD document their reviews of arms transfer requests. State and DOD agreed with the recommendations, but State noted that it would need additional resources to improve DCS reporting.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: In order to address the data and documentation deficiencies, to ensure that State reports more clear and useful information on DCS arms transfers authorized to the governments of Gulf countries, and to ensure that arms transfers are consistent with U.S. foreign policy and national security goals, the Secretaries of State and Defense should require documentation of key reviews and written assessments against policy criteria, especially for sales of significant military equipment.

    Agency Affected: Department of State

    Status: Open

    Comments: State concurred with our third recommendation, stating that documentation of its reviews of foreign policy and national security justifications for all arms transfer authorizations could be improved. State noted that its Political-Military Affairs Bureau and the Bureau of Democracy, Human Rights, and Labor are already developing a better means of documenting FMS and DCS case reviews for human rights concerns. However, State disagreed with our conclusion that the partial absence of documentation of agencies' reviews raises concerns that U.S. priorities are not consistently considered before such sales are authorized. We continue to believe the recommendation is appropriate and will monitor State's efforts to implement it.

    Recommendation: In order to address the data and documentation deficiencies, and to ensure that State reports more clear and useful information on DCS arms transfers authorized to the governments of Gulf countries, the Secretary of State should modify the DCS database system, also called the case management system, so that it has the capability to identify and separate licenses issued to U.S. government entities and overlapping values of related licenses.

    Agency Affected: Department of State

    Status: Open

    Comments: State generally agreed with our recommendations, but noted that implementation of these recommendations may require additional resources. State noted that, while it is not currently possible to identify U.S. government end-users in the database without a manual search, the department will continue to make such identifications with existing resources. State also noted that devising additional reporting formats would require the commitment or allocation of significant additional resources. Accordingly, State will encourage Congress to furnish criteria as decisions are made on Export Control Reform. We agree that State should identify U.S. government end-users in its reports to Congress. In considering modifications to its case management system, State should also ensure that the system has the capability to identify overlapping dollar values of authorizations. Since State believes that these modifications would require additional resources, we will monitor agency fiscal year 2012 budget requests for this purpose.

    Recommendation: In order to address the data and documentation deficiencies, and to ensure that State reports more clear and useful information on DCS arms transfers authorized to the governments of Gulf countries, the Secretary of State should provide more details related to data in reports on arms transfer authorizations to Congress. For example, for greater clarity, State should specify where authorization data for a country include licenses for U.S. government entities in that country as well as the value of those licenses.

    Agency Affected: Department of State

    Status: Open

    Comments: State generally agreed with our recommendations, but noted that implementation of these recommendations may require additional resources. Specifically, in response to this recommendation, State said that it recognizes the importance of maintaining and reporting reliable data on defense exports to Congress and the public. GAO continues to monitor State efforts to implement the recommendation.

    Recommendation: In order to address the data and documentation deficiencies, to ensure that State reports more clear and useful information on DCS arms transfers authorized to the governments of Gulf countries, and to ensure that arms transfers are consistent with U.S. foreign policy and national security goals, the Secretaries of State and Defense should require documentation of key reviews and written assessments against policy criteria, especially for sales of significant military equipment.

    Agency Affected: Department of Defense

    Status: Open

    Comments: In its written comments, DOD concurred with our recommendation and noted that it will identify better processes to ensure that key assessments are documented against national security goals. GAO continues to monitor DOD efforts to implement the recommendation.

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